Shanghai Able Digital Science&Tech Co., Ltd. — Interim / Quarterly Report 2018

Jul 29, 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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(incorporated in Bermuda with limited liability)

(Stock Code: 1205)

ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018

The board of directors (the “ Board ”) of CITIC Resources Holdings Limited (the “ Company ”) announces the unaudited consolidated interim results of the Company and its subsidiaries (collectively, the “ Group ”) for the six months ended 30 June 2018 (the “ Period ”).

FINANCIAL HIGHLIGHTS

Six months ended 30 June	2018	2017	Change
Unaudited	HK$ million	HK$ million
Revenue	2,145.2	1,531.5	40.1%
EBITDA1	1,015.8	838.5	21.2%
Adjusted EBITDA2 Proft attributable to shareholders	1,322.9 529.1	680.7 185.0	94.3% 186.0%

1 profit before tax + finance costs + depreciation + amortisation + asset impairment losses

• 2 EBITDA + (share of finance costs, depreciation, amortisation, income tax expense and non-controlling interests of a joint venture) – pre-tax fair value gain on a financial asset at fair value through profit or loss

All of the Group’s segments and investments recorded profits for the Period.

• An improvement in operating results of the Group’s oil business, including the Karazhanbas oilfield in Kazakhstan, attributable to a relatively higher average crude oil realised price and stringent ongoing cost control

• A turnaround in results achieved by the Group’s aluminium smelting segment, attributable to a higher sales volume of aluminium (as a result of the restoration of production at the Portland Aluminium Smelter (the “ PAS ”) to pre-outage capacity in 4Q 2017) and an increase in average selling price of aluminium

• A share of profit recorded with respect to the Group’s interest in each of CITIC Dameng Holdings Limited (“ CDH ”) and Alumina Limited (“ AWC ”)

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FINANCIAL RESULTS

CONDENSED CONSOLIDATED INCOME STATEMENT Six months ended 30 June Unaudited

Notes REVENUE 3 Cost of sales Gross proft Other income and gains 4 Selling and distribution costs General and administrative expenses Other expenses, net Finance costs 5 Share of proft of: Associates A joint venture Provision for impairment of items of property, plant and equipment Provision for impairment of other assets PROFIT BEFORE TAX 6 Income tax expense 7 PROFIT FOR THE PERIOD ATTRIBUTABLE TO: Shareholders of the Company Non-controlling interests EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS OF THE COMPANY 9 Basic Diluted	2018 HK$’000 2,145,175 (1,615,840) 529,335 54,740 (13,022) (195,586) (56,024) (132,756) 214,524 254,139 655,350 (86,814) (13,026) 555,510 (164) 555,346 529,125 26,221 555,346 HK cents 6.73 6.73	2017 HK$’000 1,531,516 (1,453,104) 78,412 522,008 (10,641) (165,618) (62,458) (164,571) 23,459 90,484 311,075 — — 311,075 (123,421) 187,654 185,022 2,632 187,654 HK cents 2.35 2.35

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Six months ended 30 June Unaudited

PROFIT FOR THE PERIOD OTHER COMPREHENSIVE INCOME/(LOSS) Other comprehensive income/(loss) to be reclassifed to proft or loss in subsequent periods: Equity instrument at fair value through other comprehensive income: Changes in fair value Income tax effect Cash fow hedges: Effective portion of changes in fair value of hedging instruments arising during the period Income tax effect Exchange differences on translation of foreign operations Share of other comprehensive loss of associates Share of other comprehensive loss of a joint venture Net other comprehensive income/(loss) to be reclassifed to proft or loss in subsequent periods Other comprehensive loss not to be reclassifed to proft or loss in subsequent periods: Equity instrument at fair value through other comprehensive income: Changes in fair value Income tax effect Net other comprehensive loss not to be reclassifed to proft or loss in subsequent periods OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD, NET OF TAX TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: Shareholders of the Company Non-controlling interests	2018 HK$’000 555,346 — — — (421,463) 126,438 (295,025) (41,445) (21,989) (810) (359,269) (337) 101 (236) (359,505) 195,841 173,655 22,186 195,841	2017 HK$’000 187,654 (214) 64 (150) 713,399 (214,020) 499,379 127,932 — — 627,161 — — — 627,161 814,815 800,786 14,029 814,815

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes NON-CURRENT ASSETS Property, plant and equipment Prepaid land lease payments Goodwill Other assets Investments in associates Investment in a joint venture Derivative fnancial instrument Equity instrument at fair value through other comprehensive income Prepayments, deposits and other receivables Deferred tax assets Total non-current assets CURRENT ASSETS Inventories Trade receivables 10 Prepayments, deposits and other receivables Financial assets at fair value through proft or loss Derivative fnancial instruments Cash and cash equivalents Total current assets CURRENT LIABILITIES Accounts payable 11 Tax payable Accrued liabilities and other payables Derivative fnancial instruments Bank borrowings Finance lease payables Provisions Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES	30 June 201831 December 2017 Unaudited Audited HK$’000 HK$’000 3,522,614 3,860,246 15,574 16,411 24,682 24,682 255,931 268,600 4,317,595 4,327,686 1,169,269 915,940 217,903 496,054 508 845 24,736 52,910 57,569 — 9,606,381 9,963,374 649,108 642,719 575,104 546,212 1,158,982 1,168,261 2,190 3,029 239,264 403,649 1,678,266 1,405,672 4,302,914 4,169,542 127,303 167,093 165 73 735,998 604,982 3,046 9,553 142,362 386,206 5,773 8,970 44,118 46,312 1,058,765 1,223,189 3,244,149 2,946,353 12,850,530 12,909,727	30 June 201831 December 2017 Unaudited Audited HK$’000 HK$’000 3,522,614 3,860,246 15,574 16,411 24,682 24,682 255,931 268,600 4,317,595 4,327,686 1,169,269 915,940 217,903 496,054 508 845 24,736 52,910 57,569 — 9,606,381 9,963,374 649,108 642,719 575,104 546,212 1,158,982 1,168,261 2,190 3,029 239,264 403,649 1,678,266 1,405,672 4,302,914 4,169,542 127,303 167,093 165 73 735,998 604,982 3,046 9,553 142,362 386,206 5,773 8,970 44,118 46,312 1,058,765 1,223,189 3,244,149 2,946,353 12,850,530 12,909,727
		9,963,374
		642,719 546,212 1,168,261 3,029 403,649 1,405,672
		4,169,542
		167,093 73 604,982 9,553 386,206 8,970 46,312
		1,223,189
		2,946,353
		12,909,727

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Bank and other borrowings Finance lease payables Deferred tax liabilities Provisions Total non-current liabilities NET ASSETS EQUITY Equity attributable to shareholders of the Company Issued capital Reserves Non-controlling interests TOTAL EQUITY	30 June 201831 December 2017 Unaudited Audited HK$’000 HK$’000 12,850,530 12,909,727 6,608,839 6,602,069 913 3,020 — 67,365 294,744 290,323 6,904,496 6,962,777 5,946,034 5,946,950 392,886 392,886 5,648,185 5,671,287 6,041,071 6,064,173 (95,037) (117,223) 5,946,034 5,946,950

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NOTES

1. BASIS OF PREPARATION

These unaudited interim condensed consolidated financial statements (“ Financial Statements ”) have been prepared in accordance with Hong Kong Accounting Standard (“ HKAS ”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”) and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”).

These Financial Statements do not include all the information and disclosures required in annual consolidated financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2017.

The accounting policies and methods of computation used in the preparation of these Financial Statements are consistent with the consolidated financial statements of the Group for the year ended 31 December 2017, except for the adoption of new and revised standards with effect from 1 January 2018 as detailed in note 2 below.

These Financial Statements were approved and authorised for issue by the Board on 27 July 2018.

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group has adopted the following new and revised Hong Kong Financial Reporting Standards (“ HKFRSs ”) (which include all Hong Kong Financial Reporting Standards, HKASs and Interpretations) issued by the HKICPA for the first time for these Financial Statements.

HKICPA for the frst time for these Financial	Statements.
Amendments to HKFRS 2	Classifcation and Measurement of
	Share-based Payment Transactions
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with
	HKFRS 4 Insurance Contracts
HKFRS 9	Financial Instruments
HKFRS 15	Revenue from Contracts with Customers
Amendments to HKFRS 15	Clarifcations to HKFRS 15 Revenue from Contracts with
	Customers
Amendment to HKAS 40	Transfers of Investment Property
HK (IFRIC) – Int 22	Foreign Currency Transactions and Advance Consideration
Annual Improvements 2014 – 2016 Cycle	Amendments to HKFRS 1 and HKAS 28

The adoption of the new and revised HKFRSs has had no significant financial effect on these Financial Statements.

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services and has four reportable operating segments as follows:

• (a) the aluminium smelting segment comprises the operation of the PAS which sources alumina and produces aluminium ingots in Australia;

• (b) the coal segment comprises the operation of coal mines and the sale of coal in Australia;

• (c) the import and export of commodities segment comprises the export of various commodity products such as aluminium ingots, coal, iron ore, alumina and copper; and the import of other commodity products and manufactured goods such as steel, and vehicle and industrial batteries and tyres into Australia; and

• (d) the crude oil segment comprises the operation of oilfields and the sale of oil in Indonesia and China.

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3. OPERATING SEGMENT INFORMATION (continued)

Management monitors the results of the Group’s operating segments separately for the purposes of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/(loss), which is a measure of adjusted profit/(loss) before tax. The adjusted profit/(loss) before tax is measured consistently with the Group’s profit before tax except that interest income, fair value gain on a financial asset at fair value through profit or loss, dividend income, finance costs, share of profit of associates and a joint venture, and provision for impairment of assets as well as head office and corporate expenses are excluded from such measurement.

Segment assets exclude investments in associates, investment in a joint venture, equity instrument at fair value through other comprehensive income, deferred tax assets, financial assets at fair value through profit or loss, cash and cash equivalents, and other unallocated head office and corporate assets as these assets are managed on a group basis.

Segment liabilities exclude bank and other borrowings, finance lease payables, deferred tax liabilities, and other unallocated head office and corporate liabilities as these liabilities are managed on a group basis.

Six months ended 30 June Unaudited HK$’000 2018 Segment revenue: Sales to external customers Other income Segment results Reconciliation: Interest income and unallocated gains Provision for impairment of items of property, plant and equipment Provision for impairment of other assets Unallocated expenses Unallocated fnance costs Share of proft of: Associates A joint venture Proft before tax 2017 Segment revenue: Sales to external customers Other income Segment results Reconciliation: Interest income and unallocated gains Dividend income Unallocated expenses Unallocated fnance costs Share of proft of: Associates A joint venture Proft before tax	Aluminium smelting 635,191 2,052 637,243 24,926 209,453 675 210,128 (153,200)	Coal 420,924 — 420,924 98,373 333,630 27 333,657 50,775	Import and export of commodities 439,142 2,302 441,444 29,476 472,791 2,050 474,841 14,429	Crude oil 649,918 28,926 678,844 305,348 515,642 27,886 543,528 67,325	Total 2,145,175 33,280 2,178,455 458,123 21,460 (86,814) (13,026) (160,140) (132,756) 214,524 254,139 555,510** 1,531,516 30,638 1,562,154 (20,671) 423,932 67,438 (108,996) (164,571) 23,459 90,484 311,075

• in respect of the coal segment

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3. OPERATING SEGMENT INFORMATION (continued)

HK$’000 Segment assets 30 June 2018 (unaudited) 31 December 2017 (audited) Segment liabilities 30 June 2018 (unaudited) 31 December 2017 (audited)	Aluminium smelting 1,077,156 1,499,505 336,992 346,647	Coal 598,672 769,864 223,560 240,463	Import and export of commodities 651,868 641,366 65,632 64,551	Crude oil 3,247,356 3,469,620 247,757 310,858	Total 5,575,052
					6,380,355
					873,941
					962,519

4. OTHER INCOME AND GAINS

An analysis of the Group’s other income and gains is as follows:

Interest income Dividend income from a fnancial asset at fair value through proft or loss Handling service fees Fair value gain on a fnancial asset at fair value through proft or loss * Sale of scrap Reversal of impairment of other receivables Gain on disposal of partial participating interest in a production sharing contract Others	2018 HK$’000 14,829 — 2,104 — 2,678 10,929 15,870 8,330 54,740	2017 HK$’000 8,951 67,438 1,814 411,278 3,106 24,082 — 5,339
		522,008

• The Group reassessed and concluded that significant influence over AWC has been demonstrated by the Group effective 30 June 2017. Consequently, the investment was reclassified from a financial asset at fair value through profit or loss to an investment in an associate on 30 June 2017. Prior to the reclassification, the investment was measured at its fair value based on the closing price of AWC shares on 29 June 2017. As a result, a pre-tax fair value gain of HK$411,278,000 in respect of the Group’s interest in AWC was recognised in the condensed consolidated income statement, representing the excess amount of such fair value over its carrying amount as at 31 December 2016.

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5. FINANCE COSTS

An analysis of finance costs is as follows:

Interest expense on bank and other borrowings Interest expense on a fnance lease Total interest expense on fnancial liabilities not at fair value through proft or loss Other fnance charges: Increase in discounted amounts of provisions arising from the passage of time	2018 HK$’000 131,525 338 131,863 893 132,756	2017 HK$’000 159,601 937
		160,538 4,033
		164,571

6. PROFIT BEFORE TAX

The Group’s profit before tax was arrived at after charging:

	2018	2017
	HK$’000	HK$’000
Depreciation	224,682	359,219
Amortisation of other assets	2,392	3,007
Amortisation of prepaid land lease payments	631	584
Loss on disposal of items of
property, plant and equipment *	309	3,743
Provision for impairment of items of property, plant and equipment	86,814	—
Provision for impairment of other assets	13,026	—
Fair value losses on derivative fnancial instruments, net *	18,602	41,022
Exchange losses, net *	25,651	7,076

• These amounts were included in “Other expenses, net” in the condensed consolidated income statement.

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7. INCOME TAX EXPENSE

Current – Hong Kong Current – Elsewhere Charge for the period Underprovision/(overprovision) in prior periods Deferred Total tax expense for the period	2018 HK$’000 — 172 (8) — 164	2017 HK$’000 — — 38 123,383
		123,421

The statutory rate of Hong Kong profits tax was 16.5% (2017: 16.5%) on the estimated assessable profits arising in Hong Kong. No provision for Hong Kong profits tax was made as the Group had no assessable profits arising in Hong Kong during the Period (2017: Nil).

Taxes on profits assessable elsewhere were calculated at the rates of tax prevailing in the jurisdictions in which the Group operates.

Australia: The Group’s subsidiaries incorporated in Australia were subject to Australian income tax at a rate of 30% (2017: 30%).

Indonesia: The corporate tax rate applicable to the subsidiary which is operating in Indonesia was 30% (2017: 30%). The Group’s subsidiary owning a participating interest in the oil and gas properties in Indonesia was subject to branch tax at the effective tax rate of 14% (2017: 14%).

China: The Group’s subsidiaries registered in China were subject to corporate income tax at a rate of 25% (2017: 25%).

According to HKAS 12 Income Taxes, deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.

8. DIVIDEND

The Board has resolved not to pay an interim dividend for the Period (2017: Nil).

The final dividend of HK 2.50 cents per ordinary share for the year ended 31 December 2017, totalling HK$196,443,000, was approved by shareholders at the annual general meeting of the Company held on 22 June 2018 and was payable on or around 17 July 2018.

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9. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS OF THE COMPANY

The calculation of the basic earnings per share amount was based on the profit for the Period attributable to ordinary shareholders of the Company of HK$529,125,000 (2017: HK$185,022,000) and the weighted average number of ordinary shares in issue during the Period, which was 7,857,727,149 (2017: 7,857,727,149) shares.

The calculation of the diluted earnings per share amount was based on the profit for the Period attributable to ordinary shareholders of the Company. The weighted average number of ordinary shares used in the calculation was the number of ordinary shares in issue during the Period, as used in the basic earnings per share calculation, and the weighted average number of ordinary shares assumed to have been issued at no consideration on the deemed exercise or conversion of all dilutive potential ordinary shares into ordinary shares.

No adjustment was made to the basic earnings per share amount presented for the Period and for the six months ended 30 June 2017 in respect of a dilution. There were no dilutive potential ordinary shares arising from share options as the respective average share price of the Company during the Period and during the six months ended 30 June 2017 did not exceed the exercise price of the then outstanding share options.

10. TRADE RECEIVABLES

An aged analysis of the trade receivables, based on the invoice date and net of provisions, was as follows:

Within one month One to two months Two to three months Over three months	30 June 2018 Unaudited HK$’000 356,169 44,231 73,978 100,726 575,104	31 December 2017 Audited HK$’000 324,727 74,532 45,716 101,237
		546,212

The Group normally offers credit terms of 30 to 120 days to its established customers.

11. ACCOUNTS PAYABLE

An aged analysis of the accounts payable, based on the invoice date, was as follows:

Within one month One to three months Over three months	30 June 2018 Unaudited HK$’000 109,330 — 17,973 127,303	31 December 2017 Audited HK$’000 148,125 — 18,968
		167,093

The accounts payable are non-interest-bearing and are normally settled on terms of 30 to 90 days.

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BUSINESS REVIEW AND OUTLOOK

Review

The surge in oil and commodities prices fostered a favourable market condition which has enabled the Group to achieve a better financial performance than in the past few years. Brent crude oil prices hit three-and-a-half-year high with an average of around US$70 per barrel for the Period.

All of the Group’s businesses recorded profits for the Period. The Yuedong oilfield in China, the Karazhanbas oilfield in Kazakhstan and AWC made significant contributions to the performance of the Group. The PAS, as a result of the restoration of its pre-outage production capacity in 4Q 2017, made a positive contribution to the Group. For these reasons, the Group achieved a significant increase in profit for the Period.

Crude oil

Attributable to the higher average crude oil realised price and stringent ongoing cost control, the Group’s crude oil business as a whole achieved a substantial improvement in operating results.

During the Period, the Group continued to implement optimal maintenance plans to minimise the negative impact on oil production caused by the continuing natural decline of existing wells. In respect of production, the Karazhanbas oilfield showed a slight increase, the Yuedong oilfield maintained at a stable level whereas the Seram Block in Indonesia had a significant drop due to a greater natural decline of existing wells. The Group’s overall average daily production was 49,450 barrels (100% basis) for the Period, representing a slight decrease when compared to 50,190 barrels (100% basis) for 1H 2017.

In May 2018, the Group completed its sale of a 10% participating interest in the production sharing contract which grants the right to explore, develop and produce petroleum from the Seram Block (the “ PSC ”) to an independent third party and the PSC was successfully renewed for a term of 20 years commencing from 1 November 2019. The Group retains a 41% participating interest in the PSC and remains the operator of the Seram Block.

Metals

The PAS resumed to its normal operation since the restoration of its pre-outage production capacity in 4Q 2017. As a result, both the production and sales volumes increased during the Period. Coupled with an increase in average selling price of aluminium, the Group’s aluminium smelting segment achieved a turnaround in results.

The Group’s equity interest in AWC was reclassified on 30 June 2017 from a financial asset at fair value through profit or loss to an investment in an associate. In respect of the Group’s interest in AWC, a share of profit using the equity method was recorded for the Period whereas a fair value gain was recorded for 1H 2017.

For the Period, CDH recorded a drop in profit from normal operations, due to a decrease in both average selling prices and sales volumes of some of the major manganese products.

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Coal

Attributable to an increase in sales volume, a comparable average selling price of coal and a reduction of costs, the Group’s coal segment recorded a better operating profit for the Period. However, the positive impact was partly offset by the provision for impairment in respect of certain capital works and mining assets. As a result, the Group’s coal segment recorded a lower profit for the Period compared to 1H 2017.

Import and export of commodities

During the Period, the Group further strengthened its marketing strategy to meet the ever-changing market environment and trading behaviours. Attributable to an increase in commodities prices, this segment recorded a better profit.

Outlook

The Group believes that oil and commodities prices will at least remain steady at current levels, which should continue to benefit the Group. The Group will ride on the current favourable market conditions to facilitate its business development. As the global economic and political environments cast uncertainties on oil and commodities prices, the Group will continue to closely monitor the fast-paced market environment and take appropriate actions to create returns for shareholders.

With the renewal of the PSC, the Group will consider resuming the exploration of the Lofin area of the Seram Block. The Group will also endeavour in promoting application of new technologies to improve productivity in the Yuedong oilfield and plans to add new wells in the oilfield under a managed drilling program.

The Group will also continue to look for quality investment opportunities to strengthen its business portfolio, release investment value and promote sustainable growth. Last but not the least, the ongoing support from CITIC Limited will drive the Group to achieve its objectives.

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

Cash

As at 30 June 2018, the Group had cash and cash equivalents of HK$1,678.3 million.

Borrowings

As at 30 June 2018, the Group had total debt of HK$6,757.9 million, which comprised:

• unsecured bank borrowings of HK$2,851.2 million;

• unsecured other borrowing of HK$3,900.0 million; and

• finance lease payables of HK$6.7 million.

Most of the transactions of the Group’s import and export of commodities business are debt funded. However, in contrast to term loans, these borrowings are self liquidating, transaction specific and of short durations, and matching the terms of the underlying transaction. When sale proceeds are received at the completion of a transaction, the related borrowings are repaid accordingly.

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In December 2016, the Company entered into a facility agreement with a syndicate of financial institutions in respect of an unsecured term loan facility of US$310 million (HK$2,418 million) (the “ A Loan ”). The proceeds of the A Loan were used to finance the repayment of an unsecured term loan facility of US$310 million entered into by the Company in March 2014. The A Loan has a tenor of three years commencing from 30 December 2016. The outstanding balance of the A Loan as at 30 June 2018 was US$310 million.

In May 2017, the Company entered into a facility agreement with a bank in respect of an unsecured term loan facility of US$40 million (HK$312 million) (the “ B Loan ”). The proceeds of the B Loan were used to finance the repayment of the then outstanding balance of an unsecured term loan facility of US$40 million entered into by the Company in September 2012 and the general corporate funding requirements of the Company. The B Loan has a tenor of three years commencing from 15 May 2017. The outstanding balance of the B Loan as at 30 June 2018 was US$40 million.

In June 2017, a wholly-owned subsidiary of the Company entered into a facility agreement with a subsidiary of CITIC Limited (a substantial shareholder of the Company) in respect of an unsecured term loan facility of US$500 million (HK$3,900 million) (the “ C Loan ”). The proceeds of the C Loan were used to finance the repayment of an unsecured term loan facility of US$490 million (HK$3,822 million) entered into by the Company in June 2015 and the general corporate funding requirements of the Company. The C Loan has a tenor of five years commencing from 29 June 2017. The outstanding balance of the C Loan as at 30 June 2018 was US$500 million.

The Group leases certain plant and machinery for its coal mine operations. The lease is classified as a finance lease.

As at 30 June 2018, the Group’s net debt to net total capital was 45.7% (31 December 2017: 48.0%). Of the total debt, HK$148.1 million was repayable within one year, including trade finance and finance lease payables.

Share capital

There was no movement in the share capital of the Company during the Period.

Financial risk management

The Group’s diversified business is exposed to a variety of risks, such as market risks (including foreign currency risk, price risk, interest rate risk and inflation risk), credit risk and liquidity risk. The management of such risks is dictated by a set of internal policies and procedures designed to minimise potential adverse effects to the Group. The policies and procedures have proved effective.

The Group enters into derivative transactions, including principally forward currency contracts, forward commodity contracts, interest rate swap contracts, embedded derivatives and electricity hedge agreements. Their purpose is to manage the foreign currency risk, price risk, interest rate risk and inflation risk arising from the Group’s operations and sources of finance.

Opinion

The Board is of the opinion that, after taking into account the existing available borrowing facilities and internal resources, the Group has sufficient resources to meet its foreseeable working capital requirements.

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EMPLOYEES AND REMUNERATION POLICIES

As at 30 June 2018, the Group had around 310 full time employees, including management and administrative staff.

The Group’s remuneration policy seeks to provide fair market remuneration in a form and value to attract, retain and motivate high quality staff. Remuneration packages are set at levels to ensure comparability and competitiveness with other companies in the industry and market competing for a similar talent pool. Emoluments are also based on an individual’s knowledge, skill, time commitment, responsibilities and performance and by reference to the Group’s profits and performance. Rent-free quarters are provided to some employees in Indonesia.

CORPORATE GOVERNANCE CODE

Throughout the Period, the Company has applied the principles and complied with the applicable code provisions, and also complied with certain recommended best practices, of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted a code of conduct for dealings in the securities of the Company by its directors (the “ Securities Dealings Code ”) that is based on the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) as set out in Appendix 10 to the Listing Rules (or on terms no less exacting than the Model Code).

All directors have confirmed, following specific enquiry by the Company, that they have complied with the required standards set out in the Securities Dealings Code throughout the Period.

PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY

Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company’s listed securities during the Period.

REVIEW OF ACCOUNTS

The audit committee has reviewed these unaudited interim results with senior management of the Company.

By Order of the Board CITIC Resources Holdings Limited Kwok Peter Viem Chairman

Hong Kong, 27 July 2018

As at the date hereof, Mr. Kwok Peter Viem; Mr. Suo Zhengang; Mr. Sun Yang and Ms. Li So Mui are executive directors of the Company, Mr. Chan Kin is a non-executive director of the Company, and Mr. Fan Ren Da, Anthony; Mr. Gao Pei Ji and Mr. Look Andrew are independent non-executive directors of the Company.

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